Chapter 6, Problem 5ME

Evaluating Inventory Cost Components

Assume Anderson’s General Store bought, on credit, a truckload of merchandise from American Wholesaling costing $23,000. If Anderson’s paid National Trucking $650 cash for transportation, immediately returned goods to American Wholesaling costing $1,200, and then paid American Wholesaling within the 2/30, n/60 purchase discount period, how much did this inventory cost Anderson’s? Assume Anderson’s uses a perpetual inventory system.